'Zombie blocks' to pull Sydney apartment prices even lower

Sydney's falling apartment prices look set to continue into the next decade, with leading economists and real estate analysts predicting ongoing construction and the rise of so-called zombie blocks will pull prices lower.

The prediction came as new figures from real estate website Domain released on Thursday showed the average apartment price in the Harbour City dropped 3.5 per cent in the 2017-18 financial year to $737,080 — the sharpest annual decline since the global financial crisis.

The falls are being driven in-part by continued apartment construction in NSW, with Australian Bureau of Statistics figures released earlier this month showing more than 66,000 apartments are under construction across the state.

An estimated 20,000 apartments are lying vacant in NSW, with the empty homes labelled "zombie blocks" in the industry.

Falls set to continue

Sydney-based SQM Research director Louis Christopher said the city's apartment prices were "nowhere near the bottom".